Petco Reports 2.3% Decrease in Net Sales, Despite Growth in Services Segment

Petco Health and Wellness Company, Inc. reported a decrease in net sales for the thirteen weeks ended May 3, 2025, totaling $1.49 billion, down 2.3% from $1.53 billion in the same period last year. The decline in revenue was attributed to lower transaction volumes and a reduced number of pet care centers, alongside a strategic focus on profitability and margin improvement. Despite the overall sales decrease, the company experienced growth in its services segment, which saw a slight increase in revenue to $251.5 million from $249.4 million, reflecting successful customer acquisition and retention efforts.

The company's gross profit for the quarter was $570.0 million, resulting in a gross profit margin of 38.2%, an increase from 37.8% in the prior year. This improvement was driven by better utilization of service offerings, effective inventory management, and supply chain optimization. Operating income was reported at $16.4 million, a significant turnaround from an operating loss of $16.8 million in the previous year. The net loss attributable to Class A and B-1 common stockholders was $11.7 million, a notable reduction from a loss of $46.5 million in the same quarter last year.

In terms of operational metrics, Petco's total pet care centers in the U.S. and Puerto Rico decreased to 1,393 from 1,423 year-over-year. The company reported an increase in Adjusted EBITDA to $89.4 million, up from $75.6 million, indicating improved operational efficiency. The company’s employee headcount remained stable, supporting its ongoing operations and service delivery.

Petco's financial position as of May 3, 2025, showed total assets of $5.12 billion, with current liabilities of $1.08 billion. The company maintained a liquidity position of $647.9 million, which includes cash and cash equivalents of $133.3 million and $514.6 million available under its asset-based revolving credit facility. The company continues to navigate macroeconomic challenges, including inflation and interest rate pressures, while focusing on strategic initiatives to enhance customer engagement and operational performance.

Looking ahead, Petco remains committed to its growth strategy, which includes expanding its service offerings and optimizing its digital and physical retail channels. The company acknowledges the uncertainties posed by external economic factors but aims to leverage its integrated omnichannel approach to meet the evolving needs of pet parents. Petco's management believes that its current resources and anticipated cash flows will be sufficient to support operations and planned capital investments for the foreseeable future.